Everything you need to know about doing business in Europe.
Compiled by Metropolitan Media
Riga
Map
Overview
The Republic of Latvia is a small nation located in the North-East of Europe within the Baltic Sea Economic Region. The State borders with Estonia (north), Russia (east), Belarus (south-east) and Lithuania (south). Latvia has a population approaching 2.4 million inhabitants with about one third of the population concentrated in the city of Riga. Although the official language is Latvian, a large part of the population is bi-lingual and speaks both Latvian and Russian. English is primarily used as the main business language in international transactions and activities.
Latvia is one of the fastest growing economies in Eastern Europe and in May 2004 the country became a full member of the European Union. The national currency is the lat which is currently pegged to the SDR (a basket of currencies). Latvia plans to introduce the Euro as the country's currency however, due to the inflation being above EMU's guidelines, this is unlikely to happen before 2009 at the earliest according to international ratings agency Standard and Poor's.
Economy
Riga is the capital of the Republic of Latvia and the geographical centre of the Baltic States. The city's cross-roads location between Western Europe and huge Eastern markets has always been - and still is - one of Riga's attractions for business activities.
Riga is also an important transport junction. The main elements that make the city as a transit center are the harbor of Riga, the Riga international airport and developed railway and road networks. The historically developed transportation infrastructure has facilitated Riga's evolution as the major industrial and business center in the Baltic region. The city is well known for its architectural and cultural values, skilful labor and developed infrastructure.
Riga is not only the backbone of Latvia's economy but also the largest center of education and science. This is confirmed by a large number of cultural events, international exhibitions, scientific conferences and seminars that every year take place in Riga.
Riga and Latvia have come a long way since independence in 1991, with the old Communist economy completely abandoned in favour of a rush towards outright Capitalism. There have been problems along the way, most notably the banking collapse of 1995. The average gross monthly wage is still around $410, although the economic fundamentals are looking good and the report card for a decade of hard work is impressive. Since the year 2000 Latvia has had one of the highest growth rates in Europe, at almost 11.9% in 2006. Riga is the economic heart of the country, with all major Latvian companies and many international players, with KPMG, Price Waterhouse and Radisson all having a presence in the city. The main Latvian industries were traditionally wood processing, textiles and agriculture but since 1991, the service sector and tourism, in particular, has become increasingly important.
Workforce
Unemployment in Latvia as a whole is running at 8.2%, while in Riga the figure is slightly lower at around 7%. Latvia has a well-educated workforce with more than 63 per cent of the population holding secondary/vocational education (well above the EU average 46 per cent). Latvia has a strong tradition of scientific research. There are research/teaching strengths in specific hi-tech areas where the educational system has traditionally been strong including physics, modern material sciences, information technologies, biomedicine, pharmaceuticals and wood chemistry.
Labour law has been brought into line with EU standards. The labour force remains very competitive due to its flexibility, adaptability and low wages. Although the law encourages trade union activity, in practice trade unions are not very active and it appears that the appeal of trade unions is diminishing among the workforce.
Latvian labour law provides for a 40 hour work week and restricts the amount of overtime that can be worked. However, the legislation is flexible enough to allow for alternate arrangements in certain cases. Employees are provided with state social benefits including health care and pensions plans. Mandatory social insurance contributions are made by both employee and employer.
